The Ripoff Alert is a new series appearing once each week on Fridays. It alerts you to the latest scams and ripoffs trying to get between you and your money, and gives you information you need to stay safe.
Child ID Theft
In last week’s Ripoff Alert I talked about adult identity theft and some of the ways you can prevent it from happening to you. This week I want to focus on a topic that some of you may not even know exists: child identity theft.
Here’s a short video that explains what child identity theft is and how it happens. According to AllClearID.com (the people who made this video), children are 35 times more likely to have their identities stolen than are adults. What’s more, about 1 in 10 children have had their identities stolen at least once. As if parents need more to worry about when raising their kids.
As you see in the video, a child’s Social Security number is a blank slate. Criminals can effortlessly open new loans, cell phone accounts, or credit cards using your child’s SSN. Because there’s no system to match names and dates of birth to SSNs to verify identity, companies often only require a cash deposit when opening accounts. What this means is that your child could have a mortgage in his or her name while still in diapers.
Child ID theft normally isn’t detected until the child attempts to apply for student loans or sign an apartment lease as a teenager. To make matters worse, the three credit bureaus aren’t interested in helping to prevent this crime. All they’re interested in is building information on you and selling it – accuracy isn’t their priority.
Until this year, there really wasn’t a way for parents to protect their children against ID theft. AllClearID now offers ChildScan, a free service that detects fraud from many sources and sends you monthly updates via email.
What’s in it for them? This is a “freemium” model, which means they offer a basic level of protection for free alongside a premium version that costs $15 a month. The premium version offers identity repair help and various levels of insurance. The basic free version is probably sufficient for most people.
This service seems to be comprehensive – they search not only credit reports but also employment and medical records and utility accounts for any use of your child’s SSN.
Children are prime targets for ID theft and are more likely than adults to have their identities stolen. Because the credit bureaus and various levels of government don’t care about our children, it’s important to be proactive in protecting them. This new service makes it much easier for parents to protect the identities of their children.
For a real-life child ID theft story, see Michelle’s post over at Making Sense of Cents. She explains how someone bought a house in her name when she was 13.